Coffin Finance: The first Partial-Collateralized Stable Coin on Fantom Opera

Introduction

What is $COFFIN?

Coffin Finance is the first Decentralized, Capital Efficient, Partially Collateralized Stable Coin protocol on Fantom Opera.

The price volatility of cryptocurrencies is a major blocker for mass adoption, especially in the case of Fantom Opera. The price stability will ease the new user’s minds for new fields.

The protocol aims to not only increase liquidity, create a way to store value on Fantom Opera, but also want to use it as a medium for some use cases after a successful launch.

Types of stable coins

As you may know, there are some types of stable tokens.

Fiat backed stable tokens

Fiat backed stable tokens, such as USDC and USDT, are issued by centralized entities.

Such custodians escrow USD and issue the stable coin on chains. They are able to always be redeemed for underlying assets, thanks to collateralization. However, there are some risks. One of them is that it is not easy for users to confirm centralized authority has enough collateral. Another thing is that such fiat-collateralized stable coins are subject to regulatory risk. We believe such coins are not suitable for decentralized culture.

Crypto collateralized stable coins

Crypto collateralized stable coins , such as DAI and sUSD, are issued on chain via some kind of over-collateralization mechanism.

Because of the over-collateralized mechanism, you don’t need to ask centralized authority to mint tokens. Smart-contract on blockchain issues tokens automatically as long as there is enough collateral.

The problem is due to its capital in-efficiency, which results from the need to have a sufficient buffer to protect its value and keep it stable. It means that generating new tokens needs a lot of money. We believe the growth of crypto collateralized stable coins has limits. We need to look for more innovative ways, right?

Algorithm / no-collateralized stable coins

In terms of efficiency, there have been several evolving stable coin projects so far. Some are already in the “graveyard”. But some are still being innovative. All of them are capital-efficient, but some of them are not very stable.

  • Basis Cash
  • Pollo Basic Cash
  • Ampleforth
  • Tomb Finance
  • etc

In the absence of collateral, as seen in these projects, it seems that only tokens which have taxes or auto-burning mechanisms can prevent failure.

Why do we seek more potentials of algorithmic, partially-collateral coins?

There is another combination type of stable tokens. It is the partial-algorithmic token.

We believe it’s one of the most innovative fields in the current DeFi world.

Coffin Finance inspired a lot from

  • Frax Finance
  • Iron Finance

We have learned a lot from them and we would like to add more features to make it more stable. We may say, we are going to release an improved version of them.

There are many examples of failures in this field. So, before you join our project, you need to read the article below first.

https://finematics.com/bank-run-in-defi-iron-finance-explained/

How to improvement, and prevent bank run

We need to learn a lot from failures.

No one can identify the true reasons for failures, but we can guess.

We believe we need to improve in terms of the following.

  • Price Oracles
  • Deflation mechanism.
  • Collateral even though not enough.
  • Arbitrage opportunity
  • Reason for the peg price.

Our doc and community will give you more details. We are very excited to see you on our community.

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Coffin Finance

Coffin Finance

Welcome to Partial Collateralized Algorithmic Stable Token Project on #Fantom. => Join our community. http://discord.gg/bG7MqNGKxV #ftm #coffin #defi